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Antitrust regulators in Washington would heavily scrutinise a potential bid by Microsoft for Yahoo, paying close attention to the impact the deal would have on the market’s internet advertisers, legal experts said on Friday.

While few competition lawyers predicted the potential deal would be blocked, the combination of the second and third-largest internet search groups, which would have a combined market share in the US of about 38 per cent, would elicit a thorough investigation by the Justice Department. Unlike some transactions in which competition authorities examine the impact of a merger on consumers, a bid by Microsoft for Yahoo would be probed in a way similar to that of traditional television or radio deals, with a focus on the impact on opportunities for online advertisers.

“There are a lot of ways into and around the internet and a lot of opportunities for advertisers,” said John Taladay, an antitrust lawyer at Howrey in Washington. “But these two companies would have just under 40 per cent of the market for search engines [in the US], which is perhaps the key source for advertisers to make initial impressions on consumers.”

One senior antitrust lawyer said the Justice Department may be discouraged from attempting to block the deal because of Google’s dominance of the sector and the number of smaller players.

The antitrust division of the Justice Department has under the Bush administration given the green light to a number of mega-mergers, including the takeover of BellSouth and AT&T by SBC. One notable exception was the DoJ’s failed attempt to block Oracle’s takeover of Peoplesoft.